More Marketers Are Moving Agency Business In-House. Why?

In-house agency penetration is growing “dramatically,” says the ANA in a new report. Some 78% of client-side marketers who are members of the ANA report having an in-house agency this year, almost doubling the rate (42%) from a decade ago. And just 12% of respondents both lack such an agency and have no interest in one, per the report.

What Are The Top Benefits of Going In-House?

For marketers who have an in-house agency, there are two clear benefits: cost efficiencies and better knowledge of brands, each cited by 83% of respondents.

Comments included in the report note that cost efficiencies “are not the silver bullet,” as external agencies are not chosen on that basis alone. Even so, cost efficiencies emerge as the primary benefit of having an in-house agency for a plurality of respondents. And it’s telling that the top KPI used to measure the effectiveness of in-house agencies is cost saving, by more than two-thirds (69%) of respondents.

Besides cost, there are a range of perceived benefits afforded by in-house agencies, per the ANA’s study. Respondents with such a set-up also report institutional knowledge (73%), dedicated staff (73%), speed, nimbleness (64%) and greater control (58%) as being among the benefits provided.

Which Services Are Being Moved and/or Performed In-House?

One measure of the in-house agency trend’s impact on external agencies? Seven in 10 respondents say they’ve moved established business that used to be handled by an external agency to their in-house agency. That’s up from 56% who reported having done so in a similar survey conducted in 2013.

The strategic service most commonly moved is creative, by 42%. Others have moved marketing/product (28%), while fewer have moved areas such as media buying (17%) and programmatic (17%). The list of strategic services performed by in-house agencies generally follows this order of hierarchy, led by creative and with media and programmatic further down the list.

This next section contains brief highlights of the specific services handled by in-house agencies and those moved from external to in-house agencies.